MANILA, Philippines--A Japanese firm started last month a $600-million coconut plantation project in northern Luzon.

Tokyo-based Pacific BioFields Corp., which has teamed up with local firm BioEnergy Northern Luzon Inc., will convert and develop about 600,000 hectares of ‘public and non-disposable’ timberland and forest land into coconut plantations.

Planting activities have started last month following the project’s groundbreaking in Caunayan village in the town of Pagudpud in Ilocos Norte province.

The plantation forms part of a bigger project that also involves the establishment of coconut methyl ester (CME), an essential component of biodiesel.

In a statement, BioEnergy president Salacnib Baterina said the coconut plantation would be the biggest in the country.

Baterina said the project would be beneficial to the residents of the area, considering the jobs it would create and the environment protection programs the company would implement.

The coconut seedlings that will be used are the “Simba” variety, Baterina added.

Pacific Biofields president Moriaki Hayashida, in the same statement, said the plan was to process the coconut produced in the plantation into CME.

Hayashida added the joint venture would put up a CME plant in Curimao town in Ilocos Norte, which will process the coconuts produced in Northern Luzon.

The entire output of the plant will be shipped to Japan to supply the country’s growing demand for biofuels, both for fuel-dependent industries and manufacturing concerns.

Hayashida said the plant’s output “will not even be enough to fill Japan’s huge biofuel requirement.”

Japan’s total diesel requirement reaches 40 billion liters a year, and its plans for a CME blend of 5 percent will create a huge demand for this additive.

Japan is one of the four Asian countries planning to mandate the blending of CME with petroleum diesel to reduce dependence on crude mineral oil.

The Pacific BioFields and BioEnergy earlier forged an agreement with the Department of Environment and Natural Resources (DENR) on this coconut planting and processing project.

So far, 65,000 hectares have been identified by the DENR technical personnel as suitable planting areas, which spans from Pagudpud, Ilocos Norte, going up to Abulog town in nearby Cagayan province.

Earlier, another Japanese firm, Toyo Engineering Corp., said it would also put up a P60-billion CME manufacturing plant in Ilocos.

The venture will need some 600,000 hectares of coconut farms in new areas, including areas in the provinces of Pangasinan, Ilocos Sur, Ilocos Norte and La Union.